United States, Wyoming, Cheyenne - 05/30/2019 (PRDistribution.com)
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Amazon’s third-party marketplace is full of independent sellers from a business perspective, the system works great for the e-commerce giant: Amazon sits back and collect fees from those sellers, whose sales on the platform continue to grow. In 2017, for the first time, more than half the products sold on Amazon came from those marketplace listings, rather than from Amazon itself it’s causing at a counterfeit problem for Amazon. Some of the independent third-party sellers have been using the marketplace and fulfilled by Amazon (FBA) as an opportunity to sell counterfeit, pirated and out of date products. The pressure on Amazon has been growing as brands such as Apple, Birkenstock and Louis Vuitton have lasted out for not being able to control the problem. Now, Amazon has acknowledged sales of counterfeits and pirated items as a risk in its annual earnings report to investors and the US securities and exchange commission.
SEC Link Below
Under the section of “risk factors” to the business, Amazon says it “could be liable” for the activities of its sellers, and explains:
Under our seller programs, we may be unable to prevent sellers from collecting payments, fraudulently or otherwise, when buyers never receive the products they ordered or when the products received are materially different from the sellers’ descriptions. We also may be unable to prevent sellers in our stores or through other stores from selling unlawful, counterfeit, pirated, or stolen goods, selling goods in an unlawful or unethical manner, violating the proprietary rights of others, or otherwise violating our policies. Under our A2Z Guarantee, we reimburse buyers for payments up to certain limits in these situations, and as our third-party seller sales grow, the cost of this program will increase and could negatively affect our operating results. In addition, to the extent any of this occurs, it could harm our business or damage our reputation and we could face civil or criminal liability for unlawful activities by our sellers.
Amazon adding third-party sales of fakes to its risk factors signals how big a problem the matter has become. In October 2018, the American Apparel and Footwear Association, a large industry trade group representing more than 1,000 brands, even asked the Office of the United States Trade Representative to add some of Amazon’s overseas marketplaces to the list of “notorious markets” it compiles each year. The list has included markets such as China’s Taobao, which has a reputation of being rife with fakes.
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